LSSA welcomes Concourt’s dismissal of application for leave to appeal
The LSSA was one of many respondents in an application brought by the University of Stellenbosch Law Clinic and others for a declaratory order in respect of, amongst other, an interpretation of the definition of ‘collection costs’ in terms of the National Credit Act. The matter was heard by the Western Cape Division of the High Court and on 13 December 2019 the Court held that collection costs include all legal fees, during and after litigation.
The LSSA appealed the judgment and order of the High Court, and on 4 November 2021, the Supreme Court of Appeal upheld the appeal. The judgment by the SCA provides indispensable certainty on the issue of legal fees chargeable to enforce credit agreements. The SCA essentially held that the definition of ‘collection costs’ in ss101(1)(g), read with s103(5) of the NCA, does not include the legal fees incurred in litigation, a view always held by the LSSA. The SCA reiterated the distinction between collection and litigation costs.
An application for leave to appeal to the Constitutional Court against the judgment and order of the SCA was dismissed on 11 February 2022, on the basis that it has no reasonable prospects of success. The SCA judgment in favour of the LSSA therefore stands.
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Click here to read the Constitutional Court order.
Click here to read the SCA judgement.